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Business News/ Markets / Ipo/  Exicom Tele-Systems IPO: Planning to invest? 10 key risks you should know before subscribing to the issue
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Exicom Tele-Systems IPO: Planning to invest? 10 key risks you should know before subscribing to the issue

Exicom Tele-Systems IPO has opened for subscription on February 27 and the price band has been fixed is set at ₹135 to ₹142 per equity share

Exicom IPO price band has been fixed at ₹135 to ₹142 per share. Premium
Exicom IPO price band has been fixed at 135 to 142 per share.

Exicom Tele-Systems IPO: The initial public offering (IPO) of Exicom Tele-Systems has opened for subscription on Tuesday, February 27 and will close of February 29,2024. The electric vehicle (EV) charging solution company has fixed the price band at 135 to 142 per equity share for the face value of 10 each for the issue.

Exicom Tele-Systems IPO is a book built issue of 429.00 crore. The issue is a combination of fresh issue of 2.32 crore shares aggregating to 329.00 crore and offer for sale (OFS) of 0.7 crore shares aggregating to 100.00 crore by promoter NextWave Communications.

The minimum lot size for an application is 100 shares. The minimum amount of investment required by retail investors is 14,200. The company has reserved not less than 75 per cent of the issue for Qualified Institutional Buyers (QIB), not more than 10 per cent for retail investors and not more than 15 per cent for Non-Institutional Investors (NII).

Also Read: Exicom Tele Systems IPO subscribed 4.72 times on day 1, retail portion booked over 14 times; check GMP, other details

The promoters of the company, being the corporate Promoter, NextWave Communications Private Limited and the individual Promoter, Anant Nahata. Monarch Networth Capital Ltd, Unistone Capital Pvt Ltd and Systematix Corporate Services Limited are the book running lead managers of the Exicom Tele-Systems IPO, while Link Intime India Private Ltd is the registrar for the issue.

Ahead of the issue opening, Exicom Tele-Systems has raised 178.05 crore from anchor investors. The company has also undertaken a pre-IPO placement of 52.59 lakh equity shares at an issue price of 135 per share aggregating to 71 crore.

The allotment for the Exicom Tele-Systems IPO is expected to be finalized on Friday, March 1, 2024. Exicom Tele-Systems IPO will list on BSE, NSE with tentative listing date fixed as Tuesday, March 5, 2024.

Incorporated in 1994, Exicom Tele-Systems Limited specializes in power systems, electric vehicle (EV) charging, and other related solutions. The company operates under two business verticals. The company is the first mover in power management solution and EV charging infrastructure.

Also Read: Exicom Tele Systems IPO: GMP, review, subscription status, other details. Buy or not?

It has 60 per cent market share in EV charging segment and is poised for bright prospects ahead with shift from conventional fuel to EV vehicles globally. Exicom Tele-System's revenue decreased by 14.79 per cent and profit after tax (PAT) rose by 24.07 per cent in FY23. The market capitalization of Exicom Tele-Systems IPO is 1715.71 crore.

The company has fixed the Exicom Tele Systems IPO price band at  <span class='webrupee'>₹</span>135 to  <span class='webrupee'>₹</span>142 per equity share.
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The company has fixed the Exicom Tele Systems IPO price band at 135 to 142 per equity share.

Here are some of the key risks listed by the company in its Red-Herring Prospectus (RHP):

Exicom Tele-Systems IPO- 10 Key Risks

-The EV supply equipment business is correlated with and dependent upon the continuing rapid adoption of, and demand for electric vehicles. The potential profitability and growth are dependent upon the continued adoption of EVs by businesses, end-users and fleet operators, support from regulatory programs and in each case, the use of the company's EV chargers, any of which may not occur at the levels they currently anticipate or at all.

-The company is dependent on the top five customers based on revenue contribution under the critical power solutions business, who contributed over 50 per cent of their revenue from operations for the six months ended September 30, 2023 and in each of the last three financial years. The customers include government entities/public sector undertakings. The loss of any of these customers or a reduction in purchases by any of them could adversely affect the business, results of operations and financial condition.

-The company is dependent on global suppliers for the supply of raw materials and key inputs and may not be able to reduce its dependency on such imports. If critical components or raw materials become scarce or unavailable, then the company may incur delays in manufacturing and delivery of their products and in completing the development programs, which could damage their business.

-The operations are dependent on continued research and development initiatives, and the inability to identify and understand, or keep up with evolving industry trends, technological advancements, customer preferences and develop new products to meet the customers’ demands may adversely affect the company's business.

- The disruption, shutdown or breakdown of operations at the company's manufacturing facilities may have a material adverse effect on our business, financial condition and results of operations.

-The failure in maintaining the quality accreditations and certifications may negatively impact the brand and reputation.

-The company typically does not enter into long-term arrangements with its customers, and does not have any firm commitment of quantity or price of products to be supplied there under. If the customers choose not to renew their agreements or continue to place orders, the business and results of operations will be adversely affected.

-Certain members of the promoter group have been subject to actions by regulatory authorities such as the Securities and Exchange Board of India (SEBI) and the stock exchanges.

-The company derived a portion (more than 50 per cent) of its revenue from operations for the six months ended September 30, 2023 and September 30, 2022 and in each of the last three financial years from customers in the telecommunication sector. Any adverse changes in the telecommunications sector could adversely impact the business, results of operations and financial condition.

-The company has recorded operating losses for the financial year ended March 31, 2021. Any losses in the future may adversely impact its business and the value of the equity shares.

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 27 Feb 2024, 08:53 PM IST
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